Miriam Hayenga Proves You Can Fight City Hall, After All -- She Gets $2.5 Mill Settlement from Phoenix

Miriam Hayenga points to the land she once hoped to develop as a Hilton Hotel -- before bad city planners and bad legal advice thwarted her plans.

Jaime Peachey

In May, we told you about Miriam Hayenga, the tennis champ-turned-developer who found her plans up-ended by arbitrary bureaucracy at Phoenix City Hall -- plus some bungled legal work from prominent attorney Paul Gilbert.

Because of Gilbert's insider status, we titled the Web version of the story, "Don't Even Think About Fighting City Hall Unless You're a Good Old Boy."

Today, we hereby retract that headline. Hayenga's tenacious fight with the city finally ended yesterday, and the moral of the story became clear: You can fight City Hall. In fact, it can be downright rewarding.

The city settled with Hayenga for a cool $2.5 million.

The settlement award was approved by the City Council in a session yesterday afternoon.

When we heard from Hayenga this morning, we could just hear her smile across the phone lines. "It takes a great deal of pressure off," she told us. "I spent a lot of money on legal fees just to get to this point."

But, she assures us, this isn't the end.

Hayenga has maintained that there were two culprits in her battle. First, the city, which promised her repeatedly that she had the right to build 120 hotel units at the Pointe Tapatio, only to renege when she closed on the land in question and got ready to build. And second, uber-lawyer Paul Gilbert, who agreed to take Hayenga's case after she got screwed out of her 120 units -- but bizarrely decided only to sue the land's seller, not the city, on her behalf.

Gilbert's decision led to Hayenga getting stomped in court. When the jury ruled that the seller, Bob Gosnell, had done nothing wrong, Hayenga was forced to pay Gosnell's attorney a staggering $615,000 in legal fees.

With the council's decision, the city will finally make things right, which include arbitrarily and retroactively "giving" the units assigned to Hayenga's piece of land to another developer. (Yes, seriously.) But Hayenga now has Gilbert and his firm squarely in her sights: She filed a lawsuit against him last month.

"I hope the attorney who advised me not to sue the city will step up and make things right," she told New Times.

Meantime, Hayenga had nothing but kind words for another member of the legal profession. Johnna Hansen had been a paralegal at Gilbert's firm, Beus Gilbert. She reached out to Hayenga when the initial trial against the land's seller began falling apart.

When Hansen ended up at a new firm, Massey & Finley, so did Hayenga. It's that firm that finally helped Hayenga sue the city -- years later than she should have -- and achieve yesterday's tidy settlement.

Hansen, Hayenga says, "really saw the wrong and wanted to make it right. She clearly was singlehandedly the person I worked with on this."

Hayenga also had high praise for former Councilwoman Peggy Bilsten.

As we wrote in our story in May:

Hayenga had hoped to call Bilsten in for a deposition. But the city's lawyers at Gust Rosenfeld claimed that the former councilwoman wasn't amenable to being called.

As it turns out, the city was playing hardball -- dishonest hardball at that. Bilsten would have none of it.

Without even consulting a lawyer, Bilsten wrote up a notarized statement last November and gave it to Hayenga's lawyers.

"I am more than happy to give my deposition," Bilsten wrote. In fact, Bilsten explained, she was writing her statement because she was terribly concerned that she'd have to leave for an international trip before she'd have a chance to be deposed.

As Bilsten explained, she'd been told during meetings in 2000 that Hayenga didn't have units at her disposal. After reading the testimony of city planners Richert and Muenker, Bilsten became convinced that they'd concealed the truth. ...

She called it a "cover-up."

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"My heart is heavy as I am writing this statement, because I believe the role of public servants is to serve with integrity and honesty," she wrote. "According to the sworn statements enclosed, this was clearly not the case."

"I'm sure she got beat up for that," Hayenga says. "But she wanted to make things right."

So: You can fight City Hall, provided you're willing to fight for years on end and you get a little help from friends in the right places. The question now is whether you can also fight one of the Valley's best-connected law firms.